Olathe, Kansas FHA Home Loans

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FHA Home Loans in Olathe, KS

FHA loans provide an excellent opportunity to buy a home in Olathe, KS. The FHA (Federal Housing Administration) was created to give the average American a chance at owning their own home. FHA loans provide home financing to many that might not otherwise qualify for a conventional mortgage. Many people think of FHA loans as being synonymous with first time home buying. While they are certainly a great choice for first time home buyers, they are also a great option for a repeat home buyer, as well as current homeowners who need to refinance their mortgage.

2019 FHA Loan Limits in Olathe, Kansas:

The city of Olathe is part of Johnson County, which the maximum FHA loan limits for 2019 are:

1 unit (single family) – $336,950

2 units (duplex) – $431,350

3 units (triplex) – $521,400

4 units (fourplex) – $648,000

The above numbers represent the absolute highest loan amounts allowed for FHA financing in Olathe. If you are in need of a larger loan amount, we have other loan products that may be suitable for you, including jumbo loans offering up to $2,000,000. As far as the minimum loan amount, we only will provide financing for $90,000 or higher. You may find other Olathe FHA lenders that provide lower loan amounts, but we have a $90k minimum loan amount (regardless of the number of units).

Every type of FHA loan that exists is available in Olathe. This includes all of the following options and loan products:

FHA First Time Home Buyer Loans – Many consider FHA loans to be the “go to choice” for first time home buyers being that they are much easier to qualify for compared to conventional loan products, or VA and USDA loans which are restricted to veterans (VA) and rural properties (USDA). FHA loans also only require a 3.5% down payment, and allow down payment assistance to be used, adding to their attractiveness.

FHA Repeat Buyer Loan – While FHA is great for first time home buyers, it is not limited to them. Many second time buyers, or even people buying a home for the third or fourth time will use FHA financing. This is largely the result of the easier qualification guidelines and low down payment option.

FHA 203k Rehab Loan – Want to rehab a property in Olathe? FHA 203k loans may be the perfect loan option for your renovation project. The 203k program allows a borrower to receive funding in addition to the purchase price which can be used towards renovation projects.

FHA Back to Work Program – For those who have experienced the unfortunate situation of a job loss, resulting in a foreclose or bankruptcy, the FHA Back to Work Program offers an opportunity to own a home again. This special home buying program for extenuating circumstances allows someone with otherwise decent credit history to buy a home again after just 1 year after a foreclosure or bankruptcy. This is a special opportunity considering all other loans require a 2 or 3 year waiting period.

FHA Energy Efficient Mortgage – Also known as the “FHA green mortgage”, the FHA EEM provides financing for enhancements to a home that will allow it to save on energy costs. This includes various enhancements related to insulation, furnaces, cooling systems, floors, ceilings, windows, and other cost saving improvements.

FHA Streamline Refinance – Already have a FHA loan? Streamline refinance your mortgage and efficiently reduce your interest rate and monthly payments with the FHA streamline loan. The streamline program does not require a new appraisal, credit check, or income documentation. It is a simple and economical method of reducing your mortgage payment efficiently.

FHA Cash Out Refinance – FHA loans enjoy the highest LTV ratios available for a cash out refinance. While conventional mortgages only allow 80% LTVs, FHA loans allow up to a 85% loan-to-value. On a $200,000, this means you can refinance and take cash out to a loan amount of $170,000. Aside from VA loans (only available to veterans), no other cash out loan allows this high of a loan-to-value ratio.

The standard requirements for FHA mortgages are the same regardless of program, with the only exception being the FHA streamline refinance which requires no documentation, no appraisal, or credit check. For home purchase loans, cash out refinancing, and renovations loans, the basic requirements include all of the following. Depending on your particular application and the type of FHA loan you need, you may be required to provide additional documentation or meet other conditions.

Credit Score – To qualify for the 3.5% down payment, you must have a 580 credit score or higher. If your credit score is between a 500-579, you still may qualify for an FHA loan, but will be required to put 10% down.

Credit History – In addition to your credit score rating, there are other credit history requirements, such as no bankruptcies or foreclosures in last 3 years.

Debt-to-Income – You can not have a debt-to-income ratio higher than 43%. However, if you have “compensating factors” you might be able to get approved with higher debt levels (a compensating factor could be more money in savings, longer job history, or great credit).

Financial Statements – You must provide bank statements, pay stubs, and tax returns. Generally, your two most recent bank statements, two most recent pay stubs, and last 2 years of tax returns.

Property Requirements – The home you want to buy must not have any hazardous conditions or materials. If the home is in bad shape and needs repairs, it might qualify for a FHA 203k rehab loan. For a standard FHA loan, the home must be move in ready though, and the appraisal of the property must specify conditions which will inform the underwriter if it is ready to be moved into.

Owner Occupied – Must occupy the home yourself and it must be your primary residence. FHA loans are not available to finance an investment property, second home, or vacation home.

Some other requirements are that you must not already have a FHA loan. You can only have one FHA loan at a time.

FHA Frequently Asked Questions
We receive a lot of questions about FHA loans. The following are some of the most common questions we receive that are not already covered on this page:

What are “compensating factors” for an FHA loan?
The FHA allows for a certain degree of leniency when it comes to what can be approved. When an applicant for an FHA loan falls a little bit short on certain requirements, but is strong in other areas, they still may get approved. Specific compensating factors are higher credit, long employment history, more in savings, or assets. Any one or more of these can help you get approved if you do not match up on other certain requirements.

Can I purchase an investment property with an FHA loan?
FHA loans are only available for a primary residence, and not investment properties. The only exception to this rule is you can buy a 2-4 multi-family property and rent out the other units, as long as you occupy one of them. Other than the case of a multi-family property, you can only own one home insured through an FHA loan.

Are cosigners allowed for FHA loans?
Yes, cosigners and co-borrowers are allowed on FHA loans. You also can have a joint applicant who is not your spouse or relative.

What are the pros and cons of FHA loans?
The main “pros” of FHA loans are: the low down payment option, they are easier to qualify for than conventional loans, the fact they are assumable and the refinancing options. The “cons” would be the costly mortgage insurance premiums, that they are not available for investment properties, and some may find loan limits in certain areas to be too low (FHA loan limits are often lower than conforming loan limits).

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